The NSW Government is proposing a law that would allow class action damages to be paid to community groups or charities.
NSW Attorney-General John Hatzistergos has invited submissions on the Civil Procedure Amendment (Supreme Court Representative Proceedings) Bill 2010, which deals with regulations regarding class actions.
A key plank in the amended Bill is that the "cy-pres" model would apply to the determination of a damages payment. This would mean that the NSW Supreme Court could order an aggregate damages payment to be administered by a fund, and distributed to affected persons, with any money remaining in the fund after six months to be distributed to its "next best use". This could include related charities or community groups.
While the proposed amendments are based on the Federal Class Action regime and would be similar to existing laws in Victoria, NSW would be the only jurisdiction to apply the cy-pres remedy.
"I think the proposed Bill is a good example of public policy and would improve access to justice," the executive director of litigation funders IMF, John Walker, told Lawyers Weekly. "It is better that money goes to the pockets of charities or consumer advocate groups than remains in the pockets of any wrongdoers."
The amended Bill would mean that public beneficiaries or charities would now be allocated money from unclaimed damages or damages that could not be practically distributed to group members. Under the current legislation, it might be returned to a party or company that was sued.
Plaintiff law firms have also welcomed the proposed Bill.
"With these changes, NSW consumers will have more power to seek legal redress collectively," Maurice Blackburn NSW principal Ben Slade said.
Slade also said that the changes would provide cost savings and greater access to justice in NSW.
However, the proposed reforms have not been embraced by the whole legal profession.
Truman Hoyle partner Graham Maher said the Bill has not properly explained how the cy-pres model would be applied.
"The Representative Proceedings Bill provides no guidance to the Court as to what cy-pres is, when such an order is appropriate or how a cy-pres scheme is to be administered," Maher said. "One thing, however, is clear: without any guidance to the Court as to how and when it should make cy-pres damages awards and who should benefit from them, these awards will remain controversial and involve the Court in criticisms both fair and unfair."
Hatzistergos said that the Bill includes recommendations from the Victorian Law Reform Commission's 2008 Civil Justice Review and the Commonwealth Attorney-General's Department's 2009 Access to Justice Report.
Submissions on the Bill can be made until 10 November.